With cost-cutting measures planned through the 2015 fiscal year and ongoing concerns about real estate-related revenue streams, Ocean View town council members had asked Town Manager Conway Gregory recently to conduct a salary review to see whether the town might be paying its employees too much, or too little.
Gregory presented a report on the issue to the council at their Dec. 4 meeting, declaring that the town’s salaries are, indeed, “in the ballpark” when compared to salaries elsewhere in Sussex County.
The town has been looking at the salary issue to ensure that the town is not spending more than necessary while still ensuring that its positions are attractive to candidates, that staff members are qualified and that turnover is not too high.
On that count, Gregory said previous assumptions had been found to be untrue. The suggestion of a high turnover rate that he’d heard when he was hired for the job this past year had proven unfounded, he said, with very little turnover.
However, Gregory did note a few potential problems in the town’s salary structure. The first is not uncommon to employers in the coastal area of Sussex County: the salary of town employees is too low to allow any employee of the town to purchase the average home in Ocean View, which is currently valued at $429,000, even in a slow real estate market.
On the up side, the town’s average salary is $736 higher annually than the average salary throughout the county. Some 75 percent of the town’s employees make above that average amount.
Gregory also had high praise for the benefits offered by Ocean View, which he declared to be one of the best sets of health, dental and life insurance plans in the county.
The Ocean View Police Department, where retention and hiring of qualified officers has been a priority, ranked seventh among 18 police departments Gregory studied as far as overall salaries for officers. When compared on the basis of the OVPD’s standard 2,280 hours scheduled per year, per officer, that rank dropped to 11th among the 18, he noted, however.
Gregory said that even with cuts planned to annual salary increase rates — from as much as 8 percent in the 2005 fiscal year to 5.5 percent from 2007 through 2009 and 4 percent in 2010 through 2013 — the town is still staying ahead of the rate of inflation, which is expected to be around 3 percent for the 2007-2009 period.
In the Public Works Department, Gregory noted the employment of two workers for a mean of 14 years, which puts the two among the highest paid municipal employees in Sussex County. Gregory said town administrative staff were “in the ballpark” also when compared to salaries earned by their peers around the county.
Cuts to overtime, increases planned for some
One of the changes Gregory recommended as the result of his study was the curtailing of overtime pay for “executive” staff, such as the head of Public Works and the town’s police chief. Instead, Gregory said their salaries should be adjusted for the loss of those overtime hours and they should simply receive flat salaries, effective May 1, 2008.
Gregory said he had found that five employees needed to have their pay adjusted, including the shift from overtime to pure salary for those executives and some increases for at least one underpaid staff member. That’s some 33.3 percent of the town’s workforce, he noted, recommending that those pay changes be effective Dec. 31, 2007.
However, Gregory again reminded the council that adjustments upward in any of the town’s expenses budget categories need to somehow be offset by cuts in other expenditures, as he had all but demanded in previous budget discussions. The adjustments during the 2008 budget for the salary changes, he said, would have to be accounted for in the 2009 fiscal year.
Gregory said he was also recommending a new salary structure for the town. “The current employee salary matrix is conceptually and fundamentally flawed and needs to be replaced,” he said, recommending that salary reviews now be conducted every three years and that from 2010 to 2013 staff not simply be given their annual raises but instead be granted a 2 percent inflationary increase and an additional 2 percent increase based on satisfactory performance reviews.
Councilman Bill Wichmann recommended the council not take any action on the recommendations at the Dec. 4 meeting, citing a desire to further review Gregory’s full report and to also include the town manager’s salary in the numbers that were presented to the council.
Mayor Gary Meredith reminded the council of the recommendation to raise five salaries effective Dec. 31, before the council’s next meeting, but the council members agreed that additional consideration of the recommendations was warranted before action was taken and said they could retroactively raise the affected salaries with a Jan. 7 vote.
Wichmann noted that he expected there to be some questions about Gregory’s own salary being exempted from the study. “The question will be why we started one level down,” he said. But Councilman Roy Thomas emphasized that the council had not instructed Gregory to include his own salary but to instead look at the pay of other town staffers.
Gregory recently received a substantial salary increase based on his performance in the job, despite the fact that he had not yet concluded his first year of employment with the town.
That raised concerns about some citizens, and for Wichmann, who has said the raise should have been discussed further before being granted and considered in the light of town policies not allowing for merit increases during the first year of employment.
The council plans to ask further questions about the salary survey of Gregory, in addition to the consideration of his own salary, prior to discussing further or taking action on the recommendations on Jan. 7.